Statutory Sick Pay (SSP) is payable to an employee earning not less than the Lower Earnings Limit per week, who falls ill for a period of four days or more. The Lower Earnings Limit for 2008-09 is £90 per week. The employer is responsible for paying SSP. It is payable for up to 28 weeks in any period of incapacity separated from a previous period of incapacity by more than eight weeks. SSP is subject to PAYE and NIC. The weekly rate for 2008-09 is £75.40.

Are directors of limited companies regarded as employees?

For National Insurance purposes, sole directors of limited companies are regarded as employees if they have a service contract with their companies. Sole directors can therefore claim SSP provided they have a service contract with their companies. The company is responsible for paying SSP. It is simply deducted from National Insurance contributions and PAYE that would otherwise be paid to HM Revenue & Customs (HMRC). If SSP payable is more than PAYE and NIC payable to HMRC, the company needs to apply to HMRC for SSP funding for the shortfall. For a sole director of a limited company, it is recommended that a doctor's certificate is obtained and kept to substantiate the start and duration of the illness.